SAF (Sustainable Aviation Fuel) Market to Reach US$50 billion in 2036

 

Globally, transportation accounts for ~20% of all CO₂ emissions. Decarbonization of the aviation and maritime sectors will require large amounts of low-carbon fuels to reach global net-zero targets. For SAF (sustainable aviation fuel), 2025 was undoubtedly a pivotal year. In both the UK and EU, regulation such as ReFuelEU Aviation meant binding blending targets for SAF came into effect, creating unprecedented large-scale mandatory demand for SAF. This demand will continue to grow as decarbonization regulation ramps up. Based on current projections, IDTechEx forecasts in the new "Sustainable Biofuels & E-Fuels Market 2026-2036: Technologies, Players, Forecasts" report that the global SAF market may reach US$50 billion in 2036.

 

 

There are several different ways to produce SAF, with the HEFA (Hydroprocessed Esters and Fatty Acids) pathway being a major contributor to early SAF growth. HEFA feedstocks can include used cooking oils and animal fats. This is the lowest cost production pathway for SAF, with a selling price not too far from conventional jet fuel.

 

 

 

However, these HEFA feedstocks are limited, and beyond 2030 the global SAF market will be faced with the "HEFA tipping point". This is when demand for SAF will keep growing due to increased global decarbonization regulation, but HEFA SAF supply will become insufficient. This will trigger a pivot to emerging SAF pathways such as alcohol-to-jet, gasification+Fischer Tropsch, and e-SAF. These technologies are less mature, but scaling up has already begun. For example, LanzaJet's Freedom Pines Fuels alcohol-to-jet facility came online in 2025, producing 9 million gallons of SAF and 1 million gallons of renewable diesel per year. However, for many emerging SAF pathways, high costs remain a significant barrier that technology development and regulation need to address.

 

 

Aviation is not the only promising market for sustainable fuels. Renewable diesel production is also expected to grow. The US will remain a leader in renewable diesel, with stackable policy support available, including the Renewable Fuel Standard, the 45Z tax credit, and the California Low Carbon Fuel Standard. Globally, the sustainable fuel market is expected to grow significantly over the next decade with IDTechEx forecasting the global renewable diesel and SAF production capacity will exceed 67 million tonnes annually by 2036, growing at a CAGR of 8.1% between 2026 and 2036. This impressive growth trajectory underscores the increasing importance of sustainable fuels in the global energy mix.

 

 

Renewable methanol production is also rapidly increasing, with several ~100,000 tonnes per annum facilities already under construction. China will soon emerge as the leading region given its dominant position in existing methanol markets, its low CAPEX construction, and its plentiful biomass and green hydrogen resources for emerging biomass gasification and e-methanol technologies. Demand for low-carbon methanol is being driven by the need for clean marine fuels, decarbonization of the chemical sector, and as a feedstock for the SAF (via the methanol-to-jet pathway).

 

IDTechEx's "Sustainable Biofuels & E-Fuels Market 2026-2036: Technologies, Players, Forecasts" report offers an in-depth analysis of the renewable methanol market, covering technology suppliers, key project developers, and announced project capacities, providing a detailed outlook on the future of renewable methanol.

 

 

The major drivers for sustainable fuel market growth are policy developments, such as SAF fuel mandates in the EU and UK or the US' 45Z tax credit, as well as a push from vehicle fleet operators and airlines to reduce carbon emissions. However, the sector also faces significant challenges associated with overall energy efficiency (especially when comparing e-fuels to EVs for road transport), feedstock availability, project development issues (long development timelines and significant funding needed) and achieving cost parity with conventional fossil fuels. Together, these drivers and challenges are shaping this rapidly developing market.

 

For more information on the "Sustainable Biofuels & E-Fuels Market 2026-2036: Technologies, Players, Forecasts" report, including downloadable sample pages, please visit www.IDTechEx.com/Biofuels, or for the full portfolio of related research available from IDTechEx, see www.IDTechEx.com.